Best way to repay my mortgage?

chipskin

I've been forced to take out a £140,000 interest only remortgage, because of my own financial stupidity!
It's only for 10 years, so i need the best way to save the £140000. Isas? Savings account? shares?. I need my money to be safe though, so no high risk stuff?
Help!

JonnyBravo

Obviously shares carry risk..... high risk?.... well probably not over 10 years but what if a low in the market coincides with your 10 year target?
ISA's - safe but youll probably not get up to your 140k target in them inside 10 years short of a major change of allowances by the govt. That said maximising your ISA is of course very tax efficient.
Why interest only mortgage? Why not re-payment if its this you need to repay and it HAS to be in ten years? Or is the 10 years flexible for you?

Lots of questions.... not enough info to give much advice of any helpful nature I'm afraid.

chipskin

Right, here goes.............

I've been turned down for a repayment mortgage(bad credit rating(missed payments)), (which was the prefered option). My mortgage now is £93,000 , There's £41,000 debt (credit cards, loans, car, etc..), and i've got an URGENT tax bill of £5,000.

Current mortgage payments £720 pmonth, debt £1200 pmonth.

Interest only repayments will be £700 pmonth, but after repaying all debt , it would seem? i should have £1200 to pay out.

So to save? £140,000 should be do-able?, no?

Hope this makes it clearer, Thanks ,Chipskin.

JonnyBravo

Well yep your basic sums arent a million miles off.
140k at 6% is indeed £700/month.

So how much to save to get to 140k in 10 years? Well of course its impossible to answer without knowing the return but youre going to need to save 900/month to reach that in 10 years at 5.5% net.

Pardon me for straying off answer a little but I'd say your biggest concern should be working out how youve run up over 40k of additional debt to your mortgage. Why havent you saved money for your tax bill?
Are you still in the same spending habits?.... if so your chances of "putting aside" 1600/month may be slim?
Work out a realistic budget first, work out where your money goes to see if your target is realistic.

kingkano

I've been turned down for a repayment mortgage

But mortgages aren't assessed by whether you want repayment or IO are they??

chipskin

This was the only option my financial adviser could get me!

getmore4less

chipskin wrote: »

Right, here goes.............

I've been turned down for a repayment mortgage(bad credit rating(missed payments)), (which was the prefered option). My mortgage now is £93,000 , There's £41,000 debt (credit cards, loans, car, etc..), and i've got an URGENT tax bill of £5,000.

Current mortgage payments £720 pmonth, debt £1200 pmonth.

Interest only repayments will be £700 pmonth, but after repaying all debt , it would seem? i should have £1200 to pay out.

So to save? £140,000 should be do-able?, no?

Hope this makes it clearer, Thanks ,Chipskin.

You have asked the wrong question.

What you need to know is what is the best way to pay of

£93kmortgage
£41k of debt
£5k tax bill

A £140k I/O mortgage may not be the best solution.

As you said you messed up could be doing it again.

But without more details it will be difficult to point you in the correct direction.

You should be asking on the debt related areas where the expertese on dealing with debt is.

Have you done the basics like a Statement of affairs or a budget if not these are the top priority.

kingkano

chipskin wrote: »

This was the only option my financial adviser could get me!

Im not sure how that works but changing from IO to repayment is simply a case of calling up the lender and telling them. Or even just making the extra payment manually and asking for it to be taken of your capital balance.

Our broker told us for our last mortgage whether we wanted IO or repayment didnt matter to the AIP or approval process.